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Despite the best efforts of the presidential candidates to motivate the members of their partisan bases by emphasizing their differences, there are some things that President Barack Obama and Republican challenger Mitt Romney agree on. But their agreement on one such issue is unfortunate because it makes them both wrong.

On trade, especially trade relations with China, both candidates are striving to look tough, supposedly to protect and create American jobs.

The Obama administration has filed official complaints about low-cost Chinese solar panels and windmills, low-cost auto parts, low-cost communications equipment, and so on. The pattern of judgment is clear: Low-cost stuff is bad for America because Americans lose jobs to foreign competitors who can build more for less.

There is an opposing view: Giving American consumers unlimited access to the goods they want to buy at prices they want to pay is good for America.

There are more American consumers than there are manufacturing workers, but that view is rarely heard in election season because the consumers receive diffuse benefits, while the beneficiaries of protection receive concentrated benefits that they know come straight from their political activism.

When Americans vote with their dollars, they are free-traders; when they vote with ballots they are more likely to support protectionists and trade warriors.

Dangerous Promises

On the campaign trail, President Obama says he wants to give tax breaks to companies that create jobs in the U.S. and tax more heavily American profits earned abroad. He wants to give government-subsidized seller financing so foreign customers will buy more American products and he wants to increase job-training and financial assistance to American workers who lose their jobs to foreign competition. Although his party in Congress has resisted such agreements in the past, he also says he wants more bilateral free-trade agreements with small countries to open markets for U.S. exports.

Romney's promises may be more dangerous than Obama's. Romney says, with equal parts insouciance and belligerence, that on the first day of his putative presidency he would label China a "currency manipulator." That would open legal doors for all sorts of American retaliation, especially tariffs to offset China's alleged price advantage from its cheap currency.

With luck, Romney will turn out to be as much of a realist as his predecessors: Obama, George W. Bush and Bill Clinton made similar pledges as campaigners, and found that once in office they preferred more temperate and diplomatic policies.

Floating Exchange

Although it's true that China buys and sells its currency in world markets to keep exchange rates stable, what country does not do that? Even the Swiss, whose prosperity was built on a strong currency managed by a financial elite, have capped the franc's value against the euro by intervening in currency markets.

In a world in which the relative values of currencies float in markets without being pegged to commodities or gold, all countries are currency manipulators and the term becomes meaningless.

Certainly the U.S. currency has friends in high places. Its value in terms of other currencies is set by the Federal Reserve and the Treasury more than by any market force.

The China-U.S. exchange rate is set by both countries and by the businesses that actually conduct trade. It is a matter of political and strategic importance to both countries, in part because the exchange of goods and services between the two is so far out of balance.

From January to August of this year, China sold the U.S. $273 billion worth of goods and bought $70 billion worth of U.S. goods, for a U.S. deficit of $203 billion. The 2012 trade deficit will almost certainly be another record, surpassing the record set last year of $295 billion.

In effect, China is offering seller financing to move its goods. Prices—in dollar terms—have been slashed. With revenues from exports to America, China lends money to the U.S. government, which is lending and giving money to Americans, who buy Chinese stuff.

Some recent news reports out of China suggest that the circle of seller-financing is not working well enough. Goods are piling up on loading docks for want of American buyers. Whole cities are built of empty apartment buildings that can't be sold or rented because export-driven Chinese businesses aren't delivering the expected pay and profits needed to finance them.

Though China has become the world's second-largest economy, it has the largest population. Its per-capita GDP—93d in the world by the International Monetary Fund's purchasing-power measurement—remains insufficient to satisfy the majority of the people. The new party bosses in China may well find that a "revolution of rising expectations" can turn into a real revolution if the expectations aren't met.

A Distant Mirror

Americans with a sense of history should understand what China is trying to do. In the early 19th century, the U.S. had seven times as many workers in agriculture as it did in manufacturing. By the end of the century there were more people working in trade and manufacturing than on farms, even though the country had welcomed millions of immigrants.

As the Cultural Revolution spun out, China was in a similar position, with hundreds of millions of people wasting their lives on collective farms. The essence of China's recent history is the construction of industry that could attract workers from the farms and make them more productive.

Instead of trying to agitate Americans about China's growing economic power, President Obama and challenger Romney should help Americans understand the vital importance of China's economic revolution.

Rather than fighting China for the next marginal factory job, the president of the United States should welcome Chinese economic growth and strengthen the two nations' partnership.